For the uninitiated, governance may seem like a side note. But in this exciting podcast, Thomas Cox, Chief Governance Officer at StrongBlock, is here to talk to us about “Governance 101 in a blockchain ecosystem”. Prior to StrongBlock, Thomas worked at Block.one which raised $4 billion in an ICO and launched the crypto currency EOS. He helped them set up their governance infrastructure. It was the first blockchain technology that allowed for governance to be done on chain in a variety of different ways.

 

What is blockchain?

A blockchain is just a ledger that has very serious promises around safety and security. When something is recorded on that ledger you can’t deny that it was there, you can’t change it and if you try to you will leave fingerprints of your attempt. This now creates a shared source of trust with players within your ecosystem. So instead of having insurance carriers and brokers disputing each versions of their respective truth you now have a shared system that all parties can be working from with a single shared version of the truth. This means as enterprises we can stop struggling over whose data to believe and now our struggle shifts into how do we make the data we all work from better.

 

What is governance?

Governance is essentially composed of three core statements:

* It’s making collective decisions

* Carrying those decisions out

* Tweaking the process for making the decisions

Thomas Cox, recommends anyone interested in governance to read James M. Buchanan, The Calculus of Consent: Logical Foundations of Constitutional Democracy.

 

What is a consortium?

A collective or a consortium is any group that gives up some of their individual power to the collective, to the entity that they're joining. Such that they can if they lose the vote, they're still bound by the majority decision and they can't opt out.

For example, in a consortium you have to figure out the following:

* Who is in and who is out?

* What are the criteria’s for joining?

* How to record proof that someone has joined and if there’s a free to joining how do you record proof of payment?

* What are the rules members of the consortium have to abide by? How is that proved?

* How to normalise the data definitions by establishing common data standards?

* How to harmonise the data flows and processes? So that for example rekeying of information isn’t necessary anymore.

If you’re going to play in the blockchain space, you’re most likely going to be doing it within a consortium and you’ll find that all of the work that you do to set up a consortium is about 90% the same work you have to do to set up a blockchain between your organisations.

You can download his presentation on: Politics and Governance of Consortium Blockchains as delivered 23-Jan-2019 Seoul

If the above represent 90% of setting up a blockchain system then why not do the extra 10% of effort to create a shared ledger where you can have that shared truth between all the parties?

Consortias aren’t something new. When people have very risky endeavours, they build consortia’s to find wants tackle the endeavour together. All blockchain is doing is helping us automate and smooth something that we've been doing as human beings...